The Life Insurance Corporation of India, the largest insurer in India has finally and formally completed the merger with a bank. IDBI Bank informed in a filing report that the acquisition and the transfer process is completed.

The process involved improving stakes via different instruments such as preferential allotment and open offers of equity to become a majority holder at one among India's NPA-ki Dukaan (a shop of Non-performing Assets). For the quarter ending September 30, 2018, IDBI Bank or the Industrial Development Bank of India reported gross NPAs of Rs 60,875.49 crores or 31.78% of total assets. The bank during the fag end of September 2018, reported a net loss of Rs 3,602.49 crores for its quarter ending. That number is sufficient to call it among leaders on the NPA list of India's sick PSU banks.

The merger received a Cabinet Committee approval on 1st August 2018. It was expected that the acquisition would help bring a turnaround in the woes at the PSU bank. Back then, the Interim Finance Minister Piyush Goyal had been reported as saying that the acquisition was a win-win situation for the bank.

"It is big decision for the Indian banking system. As a 51 per cent subsidiary of LIC, IDBI's capital adequacy will be strengthened and it will be able to come out more quickly of RBI's Prompt Corrective Action (PCA) framework for resolution of stressed assets," he said.

"The bank, in turn, would get an opportunity to tap 11 lakh LIC agents for doorstep banking services," he added.

Cut to 2019, the bank says that its deal would create "enormous value for shareholders, customers and employees of both entities through mutual synergies."

Now that the acquisition has received formal tathaasthus, the bank said that LIC would have a strategic investment in a large bancassurance channel and thereby increase productivity and reduce re-distribution costs.

The bank further said that over 800 branches of could be used as touch points for selling LIC policies.

The bank is also optimistic that a new stakeholder would help it improve investments in building data analytical capabilities. The bank thinks that such investments could help improve its analytical capabilities to read customer behaviour from both entities. The bank has an in-house team that develops software for the bank (IDBI Intech). This team was reponsible for developing most of the innovative software that helped the bank stay relevant through the 2000s and the next decade after. But, similar to the tarot-reader who failed to predict his future, the bank failed to develop a software that could catch errant borrowers.

Would LIC's investment help the bank build such a tool?

The bank is certainly confident. In its filing report, the bank claims that having LIC on board would enable the bank to enhance its product offerings, reduce distribution cost, de-risk portfolio and support retail businesses.

The bank further says, "IDBI Bank and LIC have started working to ensure full realisation of their synergies over the next 12 months. Improved financial health will pave the way for the bank to exit from prompt corrective action (PCA) in a time-bound manner and be a future-ready, top-ranked bank. LIC and IDBI Bank are committed to serve the interests of all stakeholders."

The bank thinks that its retail loan portfolio could reach 50% by fiscal 2019-20.

Of the 21 state-owned banks, 11 are under the PCA framework. These are Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank and Bank of Maharashtra.

The acquisition had caused unrest among the banks employees as well as the opposition. The All India IDBI officers association had pleaded with a High Court, challenging LIC's acquisition. The plea was dismissed last month.

The opposition, Congress party slammed the government citing market data. "Hard-earned savings of 38 crore LIC policyholders is at risk and will be burdened because Modi government wants to cover up its sins in the banking sector," said Congress spokesperson Priyanka Chaturvedi in July 2018.

Data suggests that the acquisition is worth Rs 13,000 crores, and Chaturvedi said that this acquisition was a burden to LIC's policyholders.

Financial analysts have so far commented that this acquisition could be the first step to IDBI's privatisation. The presence of India's largest insurer as a leader could also help create a turnaround in IDBI.

But will the bank regain its old glory? Do drop in your thoughts in the comments section below.